Morgan Stanley isn’t crazy about Tinder, the dating app that allows users to approve or reject potential mates by swiping left or right. A big reason why is that the app’s user base is young people, and young people don’t like paying for dating apps.

“First, given the young age of the target demo and frequent unwillingness to pay monthly recurring fees for social services, we believe Tinder will not have much success monetizing with a high-cost recurring monthly subscription offering,” Morgan Stanley wrote in a note to clients on Wednesday.

The firm added:

The challenge with freemium (charging for re-swipes, undos, read-receipts) is that a very small percentage of single people have shown an interest in paying for online dating. We think Tinder’s ‘casual dating’ offering will see a similarly low take-up rate of willing payers … In our models, we assume that 5–6 percent of Tinder users become paying members.

In a note to clients on Wednesday, Morgan Stanley initiated research coverage on IAC/InterActive, Barry Diller’s internet and media company that owns more than half of Tinder, and said the stock’s upside was not what some bullish analysts think it could be.

The firm wrote that the market saw Tinder as under-monetized—meaning there was a huge opportunity to sell more ads or get people using the app to pay, either through a subscription or in-app purchases—and that the growth of Tinder would power IAC shares higher.

In Morgan Stanley’s view, IAC’s Tinder stake provides the stock with no upside. The firm has an “Underweight” rating on shares and thinks they can fall 29 percent from current levels.

The firm acknowledges, however, that Tinder’s user growth has been explosive, rising at a compounded annual growth rate of 125 percent over the past two years to reach 55 million.

But there might not be as much of an untapped market as other analysts expect.

Morgan Stanley writes that Tinder has already reached 40 percent of its core addressable market in the U.S., and while it sees the app having 111 million users by 2018, its growth rate will fall to 8 percent.

The firm also thinks Tinder could have a repeat user problem:

We view Tinder’s unique ‘casual dating’ use case being primarily aimed at single people from 18-34. While there could be some growth in older demos, we think it will be limited … We also believe there are limits to the percentage of single people who will become active Tinder users and repeating ‘casual daters.’ And in our view, Tinder is reaching those limits in the U.S. and Europe (30 percent–40 percent).